[The Cash Nexus: Money & Power in the Modern World 1700-2000]

Article excerpt

Niall Ferguson

New York: Basic Books, 2001, xix, 552pp, US$44.95, ISBN 0-465-02325-8

Niall Ferguson, Oxford professor of political and financial history, regular commentator on current affairs, frequent contributor to the print media, and one of the few historians ever to be profiled in The New Yorker, has published his fifth book in six years: The Cash Nexus: Money and Power in the Modern World, 1700-2000. In Ferguson's previous writings, he tackled large subjects (the Rothschilds and the European economy), addressed fundamental questions (how can counterfactuals inform our understanding of the past?), and came up with provocative conclusions (Britain should not have gone to war in 1914). The Cash Nexus is similarly broad, basic, and bold. Ferguson examines the connection between politics and economics over 300 years and most parts of the world and concludes that political events and institutions, especially wars, have had a decisive impact on economic developments. He rejects the arguments of economic determinists, as well as other historians (notably Paul Kennedy) and political scientists who adhere to current prevailing wisdoms, for instance, that war is becoming less frequent, today's defence budgets are too large, the performance of the economy determines electoral outcomes, and economic liberalization promotes peace and democracy.

From start to finish, Ferguson is contrary. But he is not an irresponsible critic. He offers a comprehensive explanation to replace those arguments he dissects and discards.

The Cash Nexus is grand in conception, problematic in execution. The argument is strained at times. For example, Ferguson asserts that domestic and international political upheaval caused the most dramatic fluctuations in bond yields in France in 1914-48. The events he identifies, such as Belgium's release from the Locarno treaty, make one wonder why more obvious crises, such as the reoccupation of the Rhineland by Germany or the removal of communists from office after the Second World War, did not wreak financial havoc in France; the consequence is to cast doubt on an otherwise plausible proposition. The text is messy, so jam-packed with information, statistics, barely legible charts and arguments as to obscure the author's logic. …